House of Commons - Public Accounts

Select Committee on Public Accounts Forty-First Report

2 The benefits of the new contract

11. In its business case to HM Treasury, the Department set out its expectations of the new contract's benefits for patients, the NHS and for GPs. The overall aim of the contract is to attract more doctors to general practice, particularly in more deprived areas. GPs would have greater job satisfaction and a reduced administrative burden; patients would have more choice and better access to a wider range of services; and the NHS would see an improvement in skill mix in GP practices and reduced pressure on secondary care through the development of GP specialist services. In securing the increased funding for primary care, the Department expected that the NHS would see measurable improvements in productivity.[24]

12. The Department's planning assumption was that productivity in delivering primary care would increase annually by 1.5%. The Office of National Statistics (ONS) productivity measure, used at the time, showed that overall NHS productivity had been falling by 0.5% year on year from 1997 to the end of 2004. In 2006, the ONS introduced a revised output measure which adjusted NHS outputs, such as the number of consultations, to take into account the quality of care provided. The quality adjustment takes into account, amongst other factors, health gain and patient satisfaction.[25] The quality adjustment was developed in consultation with the Department.

13. ONS found that in the first two years of the contract, productivity of family health services, which directly relates to primary care, reduced on average by 2.5% per year. Whilst outputs have increased, the large amount of additional funding put into general practice means that the overall level of productivity has decreased (Figure 3). Thus, the quality of service and the total number of people seen by a health professional in general practice has increased, but the cost of the new services has increased at a greater rate.[26]

14. Although the Department worked with the ONS to develop a quality adjusted methodology of estimating health service productivity, it does not believe that it is meaningful for general practitioner services, or takes into account the complexities of delivering primary care. The Department also believes that the measure does not take account of other benefits that were achieved through the contract such as improving treatment and health outcomes for people with long term conditions.[27] The Department and HM Treasury are continuing to work with the ONS on improving the quality adjusted measure of productivity.[28]

Figure 3: Productivity change for family health services from 2002-2005 including an adjustment for the quality of outputs

Source: C&AG's Report, Figure 20, and Office of National Statistics Public Service Productivity: Health Care, January 2008

15. The new contract has contributed to the increase in the number of doctors working in general practice.[29] From 2003 to 2006, the number of full-time equivalent GPs working in England has increased from 30,358 to 33,091, exceeding the Department's expectations of increased numbers of doctors (Figure 4). The Department considers that the contract played a large part in achieving this increase, but it is likely that other initiatives, such as overseas recruitment, will have contributed to the rise in the number of GPs. GPs are mainly being recruited as salaried GPs as the opportunities for being a partner in a GP practices have reduced.[30] Whilst the total number of doctors has increased, there are still too few per head of population in the most deprived areas.[31]

Figure 4: Rise in the number of GPs and practice nurses

Source: C&AG's Report, Figure 22 and 23, and data on nurses from Department's Workforce census 2007

16. Since the new contract has been introduced, nurses are carrying out an increased proportion of consultations (Figure 5). They carry out routine consultations, such as asthma and diabetes reviews, and this development has helped GPs to release time to deal with more complex cases.[32] This is evidenced by the increase in the average length of a GP consultation, which has risen from 8.4 minutes in 1992 to 11.7 minutes in 2006.[33]

Figure 5: Change in the proportion of consultations undertaken by GPs and nurses

Source: C&AG's Report, Figure 23

17. The implementation of the pay-for-performance system, the Quality and Outcomes Framework, is internationally recognised as innovative, directly linking doctors' pay to the quality of service that they have provided.[34] The system pays GPs based on the points earned for meeting various quality criteria for treating specific conditions, for example, managing the blood pressure of patients with hypertension. The Framework has had an impact in improving the consistency of care, particularly for managing long term conditions such as hypertension, diabetes and asthma and has contributed toward saving lives.[35]

18. In the first three years of the contract, GP practices have universally achieved high scores in the Quality and Outcomes Framework. The average GP practice earned 91% of the points available in the first year, increasing to 95.5% in 2006-07 suggesting that the bar was set too low and was too easy for doctors to meet.[36] Indeed, the level of performance was much higher than the estimate that the Department had used to determine the level of funding the new contract would need.[37] The British Medical Association claims that it predicted that the performance of GPs under the Framework would be higher than the Department had estimated, and there is evidence that the Department reduced its estimation of performance under the Framework when budgeting for the increased cost due to the minimum income practice income guarantee (see paragraph 4 above). The Department considers that the reliability of the costing assumptions underpinning the new contract would have been better if it had had more reliable and complete information on GPs' workload and other activity.[38]

19. The Department negotiates the Quality and Outcome Framework annually and considers that it has now made the Framework more stringent, following criticism that too many points were awarded for activity that GPs were already carrying out before the Framework was introduced.[39] The annual negotiation is based on a combination of submissions from lay people and interest groups and Departmental priorities, which are then assessed by an independent academic panel. The academic panel assesses the cost effectiveness and the evidence base for each proposed indicator. There is, however, no overall strategy for the Framework. Also, the Quality and Outcomes Framework is developed on a national basis and, therefore, does not prioritise or reflect local health inequalities and local needs.[40]

20. To claim money under the Framework, GPs need to reach targets for providing a service to a specific proportion of its population. GPs are able to exclude some of their patients when recording their performance where there is a valid reason, for example, a patient refuses to attend an appointment. Primary Care Trusts are responsible for monitoring the level of exception reporting, but could not assure that the procedures were robust. The Department considers that exception reporting is necessary to avoid a situation where doctors might coerce patients into treatment, but that Primary Care Trusts should be tracking performance to identify and address outliers.[41]

24 C&AG's Report, paras 1.2, 1.27; Figure 9 Back

25 C&AG's Report, paras 3.2-3.4 Back

26 Q 5; C&AG's Report, para 3.5; Figure 20 Back

27 Q 6 Back

28 Office for National Statistics, Public Service Productivity: Health Care, January 2008 Back

29 Q 9 Back

30 Qq 64, 82 Back

31 Q 14 Back

32 Qq 26, 62, 65-67 Back

33 Q 27 Back

34 Q 8 Back

35 Q 22; C&AG's Report, paras 3.14-3.17 Back